As financial advisors we will be consulted more often in the future for advice on matters related to Aged Care.
Society is ageing and with people living longer a move to Aged Care facilities is becoming more of a reality for a greater number of people; either by choice, at the behest of family or due to a medical condition.
Throughout their financial lives we provide advice to our clients on accumulation of assets, provision of income and in relation to aged care we are able to provide advice on the best strategy to enable clients to access care but also retain assets and income. There are many myths surrounding the cost of aged care and what clients have to forego in terms of assets and income through means testing and it is our job to educate and debunk these myths. More importantly,AgedCare is a delicate issue and there is often much resistance to the inevitable loss of independence, the possible separation from a partner and the fear of the unknown. As planners we are, more than ever, focused on being effective listeners in order to determine what our clients are feeling and what outcomes they are hoping to achieve.
As planners we are able to understand the following age care process:
- The legislation, regulation and financial tests related to aged care.
- What facilities are available?
- What levels of care they provide?
- How can they be accessed?
- What will the cost be and what form will it take?
- What will the impact be on the client’s situation?
In part the decisions related to AgedCare both in terms of lifestyle and financial are a matter of timing not only in terms of your entry to Aged Care but the timing of your financial planning. So many decisions are made in haste due to a drastic change in circumstances which limits the care options available and does not allow for strategic planning such as the re-allocation of assets. We address age care issues as early as possible for our retiring clients and also forclients who may become the decision makers for parents or other relatives. Armed with the right information well in advance of decision time is a part of ourservice offering to our clients.
Consider this case:
John and Ann are both in their eighties and are recipients of the pension. John has been assessed as low care and Ann high care with the onset of dementia. Their families have been searching for a facility to accommodate both and have been depending on short term respite placements until they can find a facility. They are under pressure and are running out of time. What are the consequences of this bad timing?
John and Ann still own a substantial home which will be considered in the assets testing of the daily care rate or accommodation charge/bond. John and Ann were hoping to leave it to their family.
Ann will need to go into care before John, which does not allow the family the opportunity to retain the family home as an asset as it will need to be sold to cover the cost John’s accommodation bond and it will be assessed in the size of the bond.
The family does not have the time to assess all facilities available as positions to accommodate both are rare and they need to find something now.
Had the family, John and Ann had, had these discussions at an earlier time their finances could have been better managed and assets redistributed. If they had made decisions about the type of care they were both seeking earlier they maybeen assessed at similar levels and found an appropriate facility. They would have been made aware of the costs involved earlier and delayed their entry accordingly. This may have enabled them to retain the home within the family.
As planners providing advice in the aged care area keep informed andmore importantly continue toshare with our clients the importance of timing.